JG/Indonesian Developer Bakrieland Still Hopes to Salvage Dubai Deal

PT Bakrieland Development said on Friday that it had granted investor Limitless Holdings, a unit of debt-laden Dubai World, an extension on the expired $110 million Rasuna Epicentrum deal to the end of the month.

“We’ve decided to extend the new proposal from Limitless from February to the end of March,” Hiramsyah Thaib, Bakrieland’s president director, said in a phone interview. “It’s based on our latest meeting with Limitless late last month.”

The comment comes amid questions about the participation in the project by Limitless, which has been affected by the debt problems plaguing parent Dubai World.

In 2008, Limitless agreed to pay $110 million for a 30 percent stake in Bakrieland’s city property unit, which is working on the Rasuna Epicentrum business and residential development in Kuningan, South Jakarta. But Limitless has so far only paid $37 million and was reportedly struggling to pay the rest, leading Bakrieland to delay construction.

Hiramsyah said in January that Limitless would offer a new investment deal by February but it never materialized, prompting speculation that the collaboration was falling apart. Bakrieland announced that it conducted a roadshow to Tokyo late last month to seek financiers.

Edwin Sinaga, president director of brokerage PT Finacorporindo Nusa, said on Sunday that Limitless was trying to buy time by offering a new investment proposal.

“I think Bakrieland should try to find a new investor if it doesn’t want to postpone its project,” Edwin said, adding that the roadshow in Japan signaled that the Bakrie group property firm felt Limitless might be unable to commit to the deal.

But he added that it was too early to speculate about Limitless pulling out. “Both parties are still committed to continue the partnership. Let us wait until the end of March,” he said.

Hiramsyah said in January that Bakrieland was planning to raise funds through a rights issue and a US dollar-denominated bond offering. The company said it needed Rp 1 trillion to Rp 2 trillion ($108 million to $216 million) to fund projects this year.